Opening with a suicide at a government office, The Nice and the Good plunges the reader into a novel that explores the many aspects of love including obsession, disinterest and the secrets that individuals keep from one another. The novel revolves around the entanglements, secrets and relationships of one extended household. John Ducane, who has been given the task of investigating Radeechy's suicide, is involved with two women. One is a young woman named Jessica, who is obsessed with him and manipulates him to continue their relationship. The second woman, Kate Gray, is the wife of his co-worker, Octavian, and they have embarked on a platonic relationship within the view of her husband and family. As the novel progresses, Ducane's anxiety over the investigation, guilt over his relationship with Jessica and fear that the women will learn about each other swirl together.

The others in the household also experience entanglements and the consequences of hiding things from each other. Pierce, a young man who lives at the Gray estate in Dorset with his mother, pursues Kate and Octavian's daughter, Barbara. As Barbara rejects him, Pierce becomes more and more obsessed with both her and with swimming into Gunnar's Cave, which is only accessible during low tide. His mother Mary is troubled that neither of the two men living on the estate will confide in her about their secrets and longs for a romantic relationship. Octavian's brother, Theo, has come home from India under a cloud and Willy, a refugee scholar, refuses to talk to anyone about his time in Dachau. Paula, another woman living in the household, is tormented by the knowledge that a former lover is coming back to see her.

In his investigation, Ducane discovers that Radeechy had been engaging in some sort of "magic" in the vaults below the office. McGrath, the office messenger, has been providing items like pigeons, which were killed in the ritual, and his wife, Judy, for Radeechy's secret activities. Radeechy paid McGrath, in part to keep him quiet, and after Radeechy dies, McGrath attempts to blackmail Ducane about Jessica and Kate, eventually sending the two letters revealing Ducane's relationships with both of them. Ducane also discovers that Radeechy committed suicide, in part, because he had killed his wife. Richard Biranne, Paula's ex-husband, was having an affair with her and was present when Radeechy killed her.

As the characters' secrets begin to unravel, Pierce swims into Gunnar's Cave, followed by Ducane, who tries to save him from the high tide. The two spend a harrowing night in the cave, but survive. In the aftermath, Ducane reunites Paula and Richard after she receives a letter from her former lover that he is not coming after all. Jessica and Kate both end their relationships with Ducane, and Jessica begins to pursue Willy. Pierce and Barbara are united, and Theo receives a letter that makes him think about going back to India. Ducane and Mary realize that they love each other and they marry.